AT&T to boost 5G coverage by buying telecom for $1.25 billion

AT&T fuels 5G ambitions with $1.6B Straight Path buy

AT&T bolsters 5G spectrum portfolio with Straight Path acquisition

AT&T's 5G trials are progressing at a more measured pace than peer Verizon and the company appears to have prioritized 39GHz spectrum over the 28GHz deployed by Verizon. It expects that deal to close by next January.

AT&T will acquire 735 mmWave licenses in the 39 GHz band and 133 licenses in the 28 GHz band. (NYSE MKT: STRP) and AT&T (NYSE:T) declared the signing of a definitive merger agreement under which AT&T is to acquire Straight Path for $95.63 per share in an all-stock merger meant to qualify as a tax-free reorganization.

Verizon still has a wide lead against rivals in coverage with 28 GHz spectrum. While digging up streets to install fiber lines is expensive, time-consuming, and lends itself to regional monopolies, using wireless connections to get internet to the home has major promise. Verizon owns nearly 200 billion Mhz-POP of 28 GHz spectrum, more than 600 MHz on average nationally.

Straight Path Communications Inc is a communications asset company.

That's assuming the purchase is green-lit by the Federal Communications Commission, of course. As part of that settlement, Straight Path had to surrender 196 of its licenses in the 39 GHz band, sell the remainder of its licenses, and give 20 percent of the proceeds of that sale to the U.S. Treasury Department. If it doesn't, the company would have to fork over an additional $85 million or relinquish those airwaves back to the agency.

"The merger of AT&T and Straight Path Communications marks a vital point for us", said Straight Path Communications CEO Davidi Jonas.

"AT&T believes that millimeter-wave spectrum will have a coverage range in the hundreds of yards", MoffettNathanson Research wrote in a note to subscribers.

Straight Path Communications Inc (NYSEMKT:STRP) traded at a yearly high level of $92.00 during the last trading session.

The No. 2 USA wireless carrier said it would offer $95.63 per share, a premium of 162.1 percent to Straight Path's close on Friday. Straight Path Communications Inc has a one year low of $15.06 and a one year high of $92.00.

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